Q2/H1 Result Solid Growth Trajectory with Strong Margins but Funding Cost Pressures Remain
Infinity Trust Mortgage Bank Plc (ITMB) has delivered strong double-digit growth in both top-line and bottom-line metrics in H1 2025, reflecting the strength of its mortgage-focused business model amid Nigeria’s rising demand for housing finance. The bank’s ability to sustain profitability while aggressively expanding its loan book and asset base positions it as a viable growth stock in the financial services sector. However, rising interest expenses and elevated debt funding signal potential margin compression risk over the medium term.
🔑 Key Strengths
- Robust Revenue Growth:
- H1 2025 turnover rose 56% YoY to ₦2.8 billion from ₦1.79 billion.
- Interest income surged 51% YoY, driven by a rapid expansion in loans and advances to customers (+29%).
- Strong Profitability Metrics:
- Net profit after tax climbed 73% YoY to ₦1.24 billion.
- Profit Before Tax (PBT) margin stood at 47%, indicating efficient cost control.
- High Earnings Per Share (EPS):
- EPS rose to 57.69 Kobo, from 32.44 Kobo in H1 2024 – reflecting better returns to shareholders.
- Impressive Asset Growth:
- Total assets expanded by 42% YoY to ₦33.96 billion.
- Loan book rose from ₦16.4 billion to ₦21.1 billion, reflecting strong lending momentum.
- Capital and Reserve Strength:
- Shareholders’ equity rose to ₦11.07 billion, a 54% YoY increase, supported by retained earnings and revaluation gains.
- Revaluation reserve rose significantly from ₦204 million to ₦1.74 billion.
⚠️ Key Weaknesses / Risks
- Rising Funding Cost:
- Interest expense increased by 69% YoY to ₦770 million.
- Cost of funds pressure could erode net interest margins going forward.
- Increased Leverage:
- Customer deposits doubled to ₦11.55 billion (from ₦5.86 billion), improving liquidity but potentially introducing reinvestment risk if short-tenored.
- Debt issued and borrowings also rose to ₦9.67 billion (+14% YoY), highlighting reliance on external funding.
- Elevated Operating Expenses:
- Total OPEX grew by 24% YoY, potentially limiting further profitability growth if not controlled.
- Personnel and infrastructure costs remain major drivers.
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